Beginning of the End for Medicaid Liens?

As recently reported, the United States Supreme Court recently heard oral argument in Delia v. EMA (briefs can be found here) on the issue of States recovering Medicaid expenses from the proceeds of a medical malpractice settlement.The theory being that if the patient never paid for the medical services which are now part of a settlement they should not be reimbursed for the expense.  The same line of reasoning also extends to future medical expenses if the patient continues to receive Medicaid for expenses caused by the original malpractice.

This is a case that could have a significant impact and needs to be closely watched.  It could affect the ability to settle cases if the states are allowed to assert this type of lien.  The impact in New York State is lessened somewhat by the Medical Indemnity Fund but the MIF only covers cases related to birth injuries.  Cases involving alleged medical malpractice to adults that result in significant damages may become more difficult to settle, irrelevant of the strength or weakness of the malpractice claims, due to the size of the Medicaid lien.